Why competition is good for business

Competition is an important key to excellence. It makes your business stronger. Without competition your business can become mediocre. Competition is the process of trying to get or win something that your competitors are also trying to get or win. Its a rivalry for supremacy and may the best business win. It's the impetus that drives business excellence. A threat from your competitor will make you step up your game and build a better business.

Turning competitor threats into opportunity

Instead of viewing a competitor as a road block or even worse an automatic check in the loss column, you should use competition to help you build a better business. Why not study them to find out how you can improve your business. Competition can influence your business in the following ways

Complacency – you are forced to take action

Innovation – create a difference

Target Audience – provide the right products and services

Customer Service – build trust and strengthen relationships

Communication – learn from your competitor then do it better

Marketing – competition provides awareness

Complacency

Your confidence that you have the best product or service that will literally sell itself will only last until the next competitor comes along. Your grand opening attracts good crowds and you start to believe that its easy to run a business. All you have to do is show up every day. Then reality hits as your sales slow down. Its easy to get complacent and business owners rarely see it coming. They may blame a new competitor or people just not understanding how important their business product or service is. They need a rude awakening and if they wake up in time, that moment of truth will probably come from a competitor.

Innovation

A critical ingredient for staying on top is innovation. To be innovative is seeing things from new angles, having broad perspectives, taking risks and being flexible. You should have a clear vision about how you are going to be distinctly different and unique. Offer something different than your competitors to some different group of customers. If you don't do this, you are going to get eaten alive by the intensity of competition. An innovative culture will help your business to meet wider objectives and maintain your competitive advantage in a rapidly changing market place. Without execution, innovations are nothing more than ideas. They must be true. You can’t simply make them up. They must be important to potential clients. If not, what’s the point?

Customer Service

The first instinct of a potential customer who is thinking about your business is to find out who else does what you do to be sure they have the best deal. Use customer service as a competitive advantage to help you win new customers, build word of mouth and keep existing customers loyal. By focusing on being useful you can create amazing experiences that delight your customers. These positive experiences build trust and strengthen customer relationships. No one ever said it was easy to compete on service, however, the expectations of service are often so low that you have an opportunity to gain a competitive advantage. Businesses that deliver exceptional customer service typically enjoy more repeat business, less price elasticity, higher price points, more cross-selling opportunities, greater marketing efficiency and a host of other factors that lead to earnings growth.

Target Audience

Effective business strategy begins with focusing on the needs of a target audience. Businesses that are able to identify an audience and meet their needs better than their competitors will find themselves with a clear competitive advantage. Competition makes you focus on your target group. You can get the best price if you provide the right products and services for your customers. Determining an appropriate price depends on the market and the competitive strategy that your business has selected. An appropriate price will be determined by the competitive position that you hope to achieve relative to your competitors and the weight of your brand image.

Communication with competitors

You will find out that you have more in common with each other than you think. You have more to gain from occasional discussions than to lose. When you want to know something about a competitor, just pick up the phone and ask them. A client gave it a try and called the owner of a competing business to introduce themselves and to ask about their great web booking system. They were happy to discuss it and in return they had a few questions of their own. They have since become big supporters of each other, regularly catching up to swap stories and bounce around ideas. This 'open door' approach has helped them both for the better.

Marketing and how competitors help

When it comes to a new industry or business category, competition can actually help build awareness. If you’re in an unknown space or sector, what’s better than getting your competitors to spend their money promoting what you do, too?

Being the best is the key to achieving a competitive advantage for your business. Whether that means the best price, the easiest access, the best quality or the best service, successful businesses find a way to differentiate themselves from their competitors. The Business Minder is a business consultant and management service operating in SE Asia with clients in Bali, Indonesia, Malaysia and Singapore.